Powell "joins" the dovish camp, saying economic risks make more sense for rate cuts
2025-08-22 14:17:24
Fed chairperson Jerome Powell said "changing" economic risks gave the central bank a stronger case to cut interest rates. The comments put Mr. Powell in the "dovish" camp of the rate-setting FOMC and signalled that he might support a 25 basis point cut at the Fed's next meeting in September. While Mr. Powell acknowledged that the impact of the government's trade war on consumer prices was now "clearly visible", he suggested it was unlikely to last and could instead be a one-off shock that the central bank could ignore. "Given that the labour market is not particularly tight and there are increasing downside risks, this outcome [of sustained rising inflation] seems unlikely," he said. He added that "there are upside risks to inflation and downside risks to employment, which is a challenging situation". (Jin 10)
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